New Delhi, July 18 (UNI) The Reserve Bank of India has imposed monetary penalty ranging from Rs 50,000 to Rs 2.5 lakh on four Co-operative banks for non-compliance with certain directions issued by the NABARD or RBI relating to KYC or Fraud reporting and monitoring.
The RBI has, by an order dated July 15, 2024, imposed a monetary y penalty of Rs 50,000 on The District Co-operative Central Bank Limited, Vizianagaram, Andhra Pradesh for non-compliance with certain directions issued by The National Bank for Agriculture and Rural Development (NABARD) on ‘Frauds – Guidelines for Classification, Reporting and Monitoring’.
The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with NABARD directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of delay in reporting of frauds to NABARD was sustained, warranting imposition of monetary penalty, the RBI said in an official statement.
This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
In another case, the RBI by an order dated July 08, 2024, imposed a monetary penalty of Rs 2.50 lakh on Chandrapur District Central Co-operative Bank Limited, Chandrapur, Maharashtra for contravention of the provisions of section 20 read with section 56 of the Banking Regulation Act, 1949 (BR Act). This penalty has been imposed in exercise of powers vested in RBI, conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act, 1949.
The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2022. Based on the supervisory findings of non-compliance with statutory provisions and related correspondence in that regard, a notice was issued to the bank, advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions, as stated therein.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of sanctioning loans to its directors was sustained, warranting imposition of monetary penalty.
The RBI also has, by an order dated July 15, 2024, imposed a monetary penalty of Rs 50,000 on Sree Harihareshwara Urban Co-operative Bank Limited, Harihar, Karnataka for non-compliance with certain directions issued by RBI on ‘Exposure Norms and Statutory/Other Restrictions − UCBs’.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said direction. After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of non-adherence to the prudential inter-bank (gross) and counter party exposure limits was sustained, warranting imposition of monetary penalty.
The Central Bank also, by an order dated July 11, 2024, imposed a monetary penalty of Rs one lakh on The Vaishali District Central Co-operative Bank Ltd., Bihar for non-compliance with certain directions issued by RBI on ‘Know your Customer (KYC) norms’.
The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said direction.
After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found, inter alia, that the charge of failure to put in place a system of periodic review of risk categorisation of accounts was sustained, warranting imposition of monetary penalty, the RBI said in the release.
